TD Bank says Hooksett firm thwarted foreclosure auction

By BRENDAN CLOGSTONUnion Leader CorrespondentMay 03. 2013 11:48PMLawyers for TD Bank are arguing that a Hooksett business owner is attempting to use the police and the courts to prevent them from completing a foreclosure sale on his property.

David McCurdy is the principal of MTS Associates, which sells and services golf carts and utility vehicles, and PM Cross, a related real estate entity that leases out the property on which MTS operates. MTS remains operational, but TD Bank foreclosed on PM Cross in March, and scheduled an April 24 auction, according to bankruptcy court filings.

Bank lawyers have accused McCurdy of attempting to stonewall the auction, first attempting to use the police to prevent the bidders from stepping onto the property and then by filing for Chapter 11 reorganization mid-auction.

McCurdy and his lawyer, Peter Tamposi, could not be reached for comment. The bank's lawyer, Ed Ford, declined a request for comment.

The bank filed a foreclosure notice on the property on March 18. Prior to the auction, there had been no legal filings against the foreclosure. The auction was scheduled for April 24. Six bidders arrived at the property on Cross Road in Hooksett that day and found their entry barred by a Hooksett police cruiser.

According to Hooksett Police Chief Peter Bartlett, McCurdy initially led the officer to believe he wanted to hire a police detail for an auction, not to bar entry to one.

"The owner of MTS, from what I've been told, he called and hired a detail for an auction," Bartlett said. "When the detail was taken in from the officer, they assumed from their conversation that he was holding an auction for his golf equipment or something, and he said he just didn't want too much traffic over to this auction."

When the bank officials came to hold the foreclosure auction for the property, the owner told them that they weren't allowed on the property. However, the officer realized this was not the case.

"Clearly, it was a communication error on the part of the business owner," Bartlett said.

At this point, the officer told him that it was a civil matter, and called for a superior. Lt. Michael Labrecque was on his way to help settle the matter, but before he arrived, Ford, the bank's lawyer, not wanting to "get into a confrontation," decided to hold the auction in the parking lot.

Two of the six bidders were active in the parking lot auction: Nicholas Mercier and Louis Pichette, who the bank is alleging was clandestinely working with McCurdy. McCurdy himself was watching the proceedings from behind the cruiser while his agent allegedly recorded the auction.

Mercier's top bid was over Pichette's by $25,000 at $1,075,000. Before that bid could be finalized, PM Cross filed for Chapter 11, effectively halting the sale.

Ford has described the filing as having been made in bad faith, writing: "There is no reorganization purpose here, but only a purpose to frustrate TD Bank's ability to sell at auction to a third party for the highest and best price."

Ford has asked the bankruptcy judge, Bruce Harwood, to dismiss the bankruptcy stay and allow the bank to move ahead with the sale.

PM Cross' attorney has characterized this push as attempting to make a decision by "fire drill." He also argued that Pichette had expressed a willingness to match Mercier's bid if he walked away, and thus TD Bank had no reason to fear for its investment.

A key question in the proceedings will be whether PM Cross can be considered a small business, as Ford asserts, or a retail estate holding company, as Tamposi maintains. Bankruptcy law largely prevents small businesses from filing Chapter 11 twice in two years, as PM Cross has.

TD Bank granted a $1 million U.S. Small Business Administration-backed loan to PM Cross in 2007, according to the filing. The Hooksett company first filed for Chapter 11 protection in January 2012, and that loan was renegotiated through the courts in October at $1.1 million.

Of that loan, $963,000 was to be at 5.25 percent interest. The remaining $154,000 was interest-free, but with the caveat that this figure be paid back in five years with monthly payments of about $7,400. PM Cross missed every one of these payments, according to the bank. It offered a payment of about $6,800 in December, but the bank rejected this.

MTS Associates has never entered bankruptcy and remains operational. However, it was supposed to pay a monthly rent of $14,500. While PM Cross received $61,400 for the lease in 2011, it saw nothing from MTS in 2012 and 2013.

TD Bank remains PM Cross' largest creditor. The company owes $32,400 to the town of Hooksett and $8,200 to the Small Business Administration.